Webflow, a no-code web development platform, has raised a massive $72 million Series A round of funding led by Accel. The financing values the company at between $350 million and $400 million post-money, according to Forbes.
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Boston-based Silversmith Capital, FundersClub, Rainfall Ventures , Draper Associates, and several angel investors also participated in the round. Accel’s Arun Mathew will join the company’s board as part of the financing.
The San Francisco-based company says it “gives more people the ability to create powerful websites and applications without having to write code.” With over 45,000 customers, including Dell and HelloSign, Webflow says it is profitable and, according to Forbes, has been for two years with annualized revenue of over $20 million. It plans to use the new capital to build out its executive team and hire in general. (The company currently has over 120 employees, up from about 70 a year ago, according to CEO and co-founder Vlad Magdalin).
Webflow also wants to continue growing its customer base, and plans to invest in “extensibility, accessibility, performance, security, and data privacy” to do so. Current customers range from individual freelancers to Fortune 500 companies. They include Johnson & Johnson, Yelp, and Adobe, among others.
A $72 million round for a company of 120 people is quite outsized; presumably the firm will hire rapidly to scale its workforce to match its capital base. Or in more crass terms, the company will quickly expand its spend. (This is a standard move post-financing for nearly any startups, we’re merely reacting to the scale of new funds that Webflow now has at its disposal compared to its new capital base.)
In a blog, Magdalin detailed the company’s early struggles, noting the company launched almost six years ago. Several months later, the company was accepted into Y Combinator. But the company’s trio of co-founders were struggling. All had left their previous jobs, according to Magdalin, “and had no meaningful income.” Magdalin had cashed out his 401-K to pay for surgery for one of his daughters, and he and his wife “had racked up over $50K in credit card debt.”
Webflow eventually landed $2.9M from several seed funds and angels, with Rainfall Ventures contributing more than half its seed round.
While Webflow’s Series A is certainly outsized compared to historical norms, the company is hardly alone in raising such a huge sum for what should be its first institutional round (the real definition of a Series A). Indeed, some other entrants for large nine-figure Series A financings in 2019 include $250 million for biotech company Century Therapeutics, $230 million for London-based fintech startup Checkout, and $200 million for South Korean cryptocurrency exchange platform Bithumb.
In short, yes, Webflow’s Series A round is abnormal historically. It is also perfectly normal when it comes to 2019.
Illustration: Li-Anne Dias.